More Investments Planned For U.S. Ethylene Production

The chemical industry's rush to tap into U.S. shale resources continued last week as Dow Chemical announced a series of investments to expand olefins production and Brazil's Braskem disclosed that it is considering building ethylene and polyethylene plants in the country.

Dow plans to build a new "world-scale" ethylene cracker on the U.S. Gulf Coast by the end of 2017. It will start up an "on-purpose" propylene plant at its Freeport, Texas, complex in 2015. In addition, the company says it is exploring building a propane dehydrogenation plant, using its own technology, by 2018.

Dow is also pursuing near-term investments. The company will restart a cracker that it idled in 2009 in Hahnville, La., by the end of next year. Improvement projects in Plaquemine, La., and Freeport will allow crackers at those sites to process more ethylene by 2014 and 2016, respectively.

To secure feedstock supplies, Dow is considering building a joint venture gas fractionator with a partner. It has signed a memorandum of understanding with gas-supplier Range Resources for ethane from the Marcellus region in Pennsylvania. Additionally, it has inked ethane and propane supply agreements with gas suppliers from the Eagle Ford gas-shale region in eastern Texas.

"The improved feedstock outlook for U.S. natural gas supply from shale brings the prospect of competitively priced ethane and propane feedstocks to Dow, and the promise of new manufacturing jobs to America," says Jim Fitterling, Dow's executive vice president for corporate development and hydrocarbons.

In recent weeks, Chevron Phillips Chemical announced a new ethylene cracker for the Gulf Coast and Westlake Chemical unveiled a series of ethylene expansions.

And Brazilian petrochemical giant Braskem is considering a U.S. cracker to feed polyethylene production as well. "The availability of shale gas--that could unlock some opportunities," CEO Carlos Fadigas said at a meeting at the New York Stock Exchange last week.